Wells Fargo has been in the midst of a PR nightmare. Last month, numerous outlets reported that the company had opened millions of unauthorized bank and credit accounts.
Last week, Lacy Harber, a North Texas investor, entrepreneur and philanthropist, decided to run an ad in The Dallas Morning News, The New York Times, San Francisco Chronicle, and The Charlotte Observer, asking the Senate Banking and House Financial Services committees to extend their investigation into Wells Fargo Advisors.
Why is Harber So Mad?
According to Harber, in August of 2015, Wells Fargo Advisors allegedly caused him to lose nearly $6 million. He started the day by asking his Wells Fargo broker to buy $34.8 million in Triple-A stocks. Harber apparently bought the stocks on margin, meaning the bank loaned him most of the money. As the market tanked, Harber says, they asked him to pay the full $34.8 million, or sell his stock to cover.
Harber sent $19 million by 12pm, but was later told, they wanted the full amount. When he didn’t send the remainder of the balance, he says Wells Fargo liquidated his account –which cost him almost $6 million. The “salt in the wound” was an additional charge for brokerage fees totaling almost half a million dollars.
Where is the Case Now?
After the lawsuit was filed, it was forced into arbitration, and the matter is pending before the Financial Industry Regulatory Authority. Harber had been doing business with Wells Fargo since 1973. He has since sold his stock in Wells Fargo which was worth about $19 million. For its part, Wells Fargo claims Mr. Harber is a sophisticated investor who knew what he was doing. Wells is in litigation with Harber, and is strongly defending the lawsuit.
Whether you’re dealing with a broker who has been in business for 100 years, or one year, and regardless of who wins or loses in the matter above, it’s always a good idea to have knowledge of the rules and regulations when investing your money. At the Harris Firm, we are ready to help if you have experienced a problem with whomever you have invested your hard-earned savings.
